BOSTON — Teva Pharmaceuticals USA, Inc. and Teva Neuroscience, Inc. are under federal siege for allegedly orchestrating a decade-long scheme to corrupt Medicare’s co-pay system, funneling over $300 million through two so-called charitable foundations to boost sales of its multiple sclerosis drug, Copaxone. The Justice Department unsealed a False Claims Act complaint accusing the drug maker of turning philanthropy into a backdoor bribery operation while jacking up the drug’s price by 329%.
Federal prosecutors allege that from 2006 through at least 2015, Teva funneled massive payments to the Chronic Disease Fund (CDF) and The Assistance Fund (TAF) with the explicit understanding the money would be used to cover Medicare co-pays for patients prescribed Copaxone. These co-pays—designed by Congress to keep drug pricing in check—were effectively erased for thousands of beneficiaries, shielding them from the drug’s soaring cost, which climbed from $17,000 to more than $73,000 per year.
According to the complaint, Teva coordinated the scheme through Advanced Care Scripts, Inc. (ACS), a specialty pharmacy that directed Copaxone patients to the foundations for co-pay relief. The arrangement wasn’t charity—it was a calculated strategy to inflate demand for Copaxone by eliminating financial barriers for Medicare patients, directly violating the Anti-Kickback Statute, which bars drug companies from paying any remuneration to induce federal health care program purchases.
“Teva’s alleged kickbacks undermined the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices,” said Andrew E. Lelling, U.S. Attorney for the District of Massachusetts. “They didn’t just raise prices—they rigged the system so patients wouldn’t feel them.”
Federal investigators say the drug maker’s conduct eroded market accountability and forced taxpayers to shoulder the inflated costs. Acting Assistant Attorney General Ethan P. Davis of the DOJ’s Civil Division said the department is committed to dismantling such schemes: “We will continue to root out these unlawful kickback arrangements that undermine the integrity of federal health care programs.”
FBI and HHS inspectors general echoed the outrage. “As alleged, Teva gamed Medicare and tried to deflect attention away from a 329% increase in the cost of its drug by masking kickbacks as charitable contributions,” said Joseph R. Bonavolonta, FBI Boston. Special Agent in Charge Phillip M. Coyne of HHS-OIG added that such greed-driven fraud “drive up health care costs for everyone and undermine public trust.” The case remains ongoing.
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Key Facts
- State: Massachusetts
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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